No penalty for mis-declaration of origin of goods without any evidence of deliberate mis-declaration

Shobha Plastics Pvt Limited Vs Commissioner of Customs (CESTAT Ahmedabad)

The Principal Commissioner of Customs Ahmedabad vide impugned order has imposed penalty under section 112 (a) of the Act upon the appellants Jayesh Mehta and Harshad Vadodaria on the ground that appellants herein have aided and abetted the importer in importing the goods by way of mis-declaring the country of origin. The appellants said role in relation to import of goods is not borne out of facts on record. Significantly, the case of the department of mis-declaration of Chinese origin goods for evading anti-dumping duty is wholly directed against Nalin Mehta. Jayesh Mehta has stated in his statement that he attended the work of customs clearance as representative of CHA and acted upon the direction of Nalin Mehta. There is no evidence to show that at the time of imports he was aware that goods were allegedly being mis-declared by Nalin Mehta to customs. Harshad Vadodaria has specifically stated in his statement that he was not aware that by using his factory’s name and IEC Nalin Mehta and Jayesh Mehta indulged in evasion of anti-dumping duty by mis-declaring the country of origin. There is no other reliable and corroborative evidence to establish that appellants herein had knowledge that goods imported were of Chinese Origin, in that view it cannot be said that appellants herein have committed any act or omission, which rendered the goods liable to confiscation, accordingly penalty under section 112 (a) cannot be sustained. Further, impugned order imposed penalty under section 112 (a) whereas show cause notice invoked section 112 (b) of the Act, appellants herein were not put to notice under section 112 (a), the same cannot sustain in view of judgement in the case of Amrit Foods V. Commissioner – 2005 (190) ELT 433 (SC).

FULL TEXT OF THE CESTAT AHMEDABAD ORDER

The appellants herein have preferred the appeals against the impugned Order-In-Original No. AHM-CUSTM-000-COM-003-18-19 dated 20.04.2018 of the Principal Commissioner of Customs, Ahmedabad. Mr. Jayesh Mehta and Mr. Harshad Vadodaria have preferred the appeals against imposition of penalties under section 112(a) of the Customs Act, 1962 whereas Shobha Plastics Private Limited has preferred appeal against appropriation of amounts deposited during investigation. Mr. Harshad Vadodaria is the Director of Shobha Plastics Private Limited.

2. Facts relevant to the matter are that, DRI booked a case as against one Mr. Nalin Mehta, Director of M/s Mehta Impex Pvt. Ltd., Mumbai alleging that he evaded anti-dumping duty on vitrified tiles imported by mis-declaring the country of origin as Malaysia, instead of China. Consequently, three Show Cause Notices viz. SCN No. DRI/AZU/INV/-13/2006 dated 29.11.2007, SCN No. DRI/AZU/INV-14/2006 dated 13.08.2007 and SCN No. DRI/AZU/IV-15/2006 dated 31.1.2008 were issued inter-alia raising demand of anti-dumping duty jointly and severally on Nalin Mehta and Shobha Plastics Private Limited, which culminated into Order dated 05.11.2008 of the Commissioner of Customs, Ahmedabad. However, the said Order dated 5.11.2008 was set aside by Tribunal vide its Order dated 15.04.2009 with a direction to the Commissioner to fix responsibilities of each and every individual separately. Thereafter Commissioner vide his common Order dated 19.01.2011 held Nalin Mehta to be the real importer of the goods and fixed duty liability upon him along with interest and penalties. He further imposed penalty of Rs. 10,00,000/-under section 112(b) of the Act on Mr. Jayesh Mehta and penalty of Rs. 5,00,000/- under section 112(b) of the Act upon Mr. Harshad Vadodaria and further appropriated amounts deposited during investigation on behalf of Shobha Plastics Pvt Limited against the duty and interest liabilities which was fixed upon the importer namely Nalin Mehta.

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